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Renault keen on GM stake

2006-07-04 08:09

After a meeting of Renault's board of directors here, the company said it had endorsed the opinion of its chief executive Carlos Ghosn that General Motors should initiate the discussions.

"The board of directors approved the position proposed by Carlos Ghosn: exploratory discussions with General Motors concerning a potential alliance could start if General Motors Corporation makes the proposal," a statement from Renault said.

Billionaire US investor Kirk Kerkorian who owns 9.9% of GM is keen to see the struggling US group join the two-way alliance linking Renault and Japanese group Nissan.

Earlier on Monday, the board of Nissan had given Ghosn, who is chief executive of both Nissan and Renault, a mandate to explore the idea of a three-way deal with GM.

General Motors is in the midst of painful restructuring with plans to cut 30 000 workers in the United States and to close several plants in the face of stiff competition from Japanese carmakers.

Japan's Kyodo news agency reported at the weekend, citing unnamed informed sources, that Renault and its Japanese partner were considering a capital investment of up to 20% in General Motors.

Investors will now look to General Motors to reply to the positive overtures made by both Renault and Nissan.

However, any response is likely to be hindered by the July 4 public holiday in the US on Tuesday.

In considering the offer of talks, GM executives are expected to be mindful of a previous alliance with Italian car group Fiat that ended badly for the US group with a loss of $2bn.

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